Better late than never, we finally transferred our Columbia funds from Ameriprise to Fidelity. Now we would like to transition to a 3-fund strategy, thanks to all the good advice on Bogleheads. We have some IRAs and TIAA-CREF and a 401K at work, which can also be re-allocated. I’ve been reading the wiki and forum posts, but a still pretty much a newbie.

Here is my preliminary plan:
Convert (sell and buy) all Columbia IRA funds with bond fund (FSITX).
Convert all Roth funds (Columbia & Fidelity) to Total US Stock
Sell the Taxable funds with the least amount of appreciation AMVAX, COLTX, IMRFX, and INDZX(2). Most of this is long-term capital gains so should be taxed at 15%. Keep the two funds/stocks with the highest cost basis AQEAX, USB. Use these funds/stocks for charitable donations, instead of using new income.
Convert TIAA CREF TLQIX T-C Lfcyle Idx 2030 to 2025 since it more closely matches my desired bond allocation, and I can leave it alone without constant rebalancing.
Use the 401K to achieve the final target AA of 65/35.

Questions:
One of the taxable funds, COLTX, actually lost money based upon the cost basis (thank you Ameriprise). Can we do some tax harvesting? How do you do that?
Does donating the funds with a low cost basis for charity make sense? Perhaps a certain amount once per year.
Does it make sense to keep any of the Columbia funds except for the one with the low cost-basis? Our ex-Ameriprise advisor thought we should keep our Columbia funds since we already paid the load on them.

The wiki has all the info you need to know. Basically, you sell the fund with a loss in order to postpone taxes. The main thing is that you don't want to create a wash sale. Since you are going from an active fund to an index fund, that won't be a problem.

Hi, your plan looked reasonable to me. Appreciated stocks can be donated to save some taxes. Fidelity has a donor advised fund suitable for charities that cannot accept appreciated stocks. You can spread out the selling of funds across multiple years to lessen the effect of realizing capital gains.

I do see that your traditional 401k portion was significantly larger compared to the taxable portion. Maybe this is a time to stop contributing to traditional 401k unless there is company matching to be had. You can still contribute to Roth IRA if you are under the income limit.

I think you can hold AQEAX for now, since it has the most capital gains. Wait for a recession to sell it.

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Tyler Aspect wrote:Hi, your plan looked reasonable to me. Appreciated stocks can be donated to save some taxes. Fidelity has a donor advised fund suitable for charities that cannot accept appreciated stocks. You can spread out the selling of funds across multiple years to lessen the effect of realizing capital gains.

I do see that your traditional 401k portion was significantly larger compared to the taxable portion. Maybe this is a time to stop contributing to traditional 401k unless there is company matching to be had. You can still contribute to Roth IRA if you are under the income limit.

I think you can hold AQEAX for now, since it has the most capital gains. Wait for a recession to sell it.

I believe my church will accept appreciated stocks, and we can we can deduct the current value we donate from our taxes. Thus we probably will hang on the AQEAX and start donating it over time, a few shares at a time, since were going to donate anyway. It seems to make sense to do this versus using money earned this year. You mentioned waiting for a recession to sell the AQEAX, I'm curious to know, why that would be a good strategy?

Tyler Aspect wrote:
I do see that your traditional 401k portion was significantly larger compared to the taxable portion. Maybe this is a time to stop contributing to traditional 401k unless there is company matching to be had. You can still contribute to Roth IRA if you are under the income limit.

There is a match 6% match, after an 8% contribution. I'm contributing more like 17% to try to hit the tax deferred limits. It does seem like our taxable funds are relatively small compared to the tax advantaged funds. We think we can start to build the taxable portion more now that we have the house paid off and eliminated some other expenses. Good point though.

mhalley wrote:The wiki has all the info you need to know. Basically, you sell the fund with a loss in order to postpone taxes. The main thing is that you don't want to create a wash sale. Since you are going from an active fund to an index fund, that won't be a problem.